I'm a senior editor and the Shanghai bureau chief of Forbes magazine. Now in my 14th year at Forbes, I compile the Forbes China Rich List, Hong Kong Rich List and Taiwan Rich List. I was previously a correspondent for Bloomberg News in Taipei and Shanghai and for the Asian Wall Street Journal in Taipei. I'm a Massachusetts native, fluent Mandarin speaker, and hold degrees from the University of Vermont and the University of Wisconsin at Madison.

3/05/2013 @ 6:52AM3,071 views

In a country where wealth is often associated with corruption, few embody the brighter side of entrepreneurial success more than Chinese search engine Baidu’s CEO Robin Li. He’s a focused techie, works hard, is married with kids, and is a graduate of well-regarded universities (see related story here). Baidu is U.S.-listed and plays by internationally recognized accounting rules in a country where fraud is a widespread problem.

So Li’s drop from the top spot among Chinese on the new Forbes Billionaires List to No. 4 this year is somehow disappointing. His wealth fell to $6.9 billion from $10.2 million a year ago. China’s No. 1 on the new list, Zong Qinghou, hails from the beverage industry and is recognized as a spirited pioneer in that business. (Click here for a list of China’s 10 richest people.) Zong also surpassed Li on Forbes China Rich List published last October.

At least the challenge ahead for Baidu is clear. The company’s shares have tanked on worries about growth. Li made his fortune during an era when the PC was the main online search tool. Now, growth is switching to mobile devices. In a report last month giving Baidu’s shares an “underperform” rating, Credit Swiss cited “low monetization of mobile search traffic and soft growth of PC search traffic” in lowering its revenue forecast for the fourth quarter of last year. Besides mobile search, traffic growth is increasing in other areas that may be harder for Baidu to make much money from in the near term, such as online video player iQiyi and travel site Qunar.

What’s the argument for buying Baidu’s shares today? Relatively low valuation, high barriers to entry in search in China, and cyclical economic improvement in China’s economy this year, among other reasons, said J.P.Morgan in February, when it put an “overweight” on the stock and a target price of $140. That’d be a good return from Baidu’s close of $90.26 yesterday, though note: J.P.Morgan has done underwriting work for Baidu in the past year, so it’s talking about one of its own clients.

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